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Is mining threatening our food security?

..there must be some data that they could have used to address the “value” of having future food security.

This was a request once made of me in the context of losing productive capacity in agriculture from cutting water entitlements on environmental grounds. It certainly got me thinking. Given the recent conflicts between farmers and gas companies over potential land and groundwater contamination from coal seam gas extraction, questions around whether we should preserve agricultural productive capacity, and how best to do it, appear to be important for policy makers.

The UN, in line with arguments of Amartya Sen, suggest that food security is not a concept of national food self-sufficiency, but more closely aligned to distribution of income,so that people have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life. This definition is not particularly helpful in this context, given Australia’s relative wealth and generous welfare system.

Much of the hype surrounding the topic, including one key focus of the recently finalised Senate inquiry into food production capacity, leads one to believe that food security means national self-sufficiency of food production. As the inquiry notes:

From Australia’s perspective, it is imperative that we maintain a productive base capable of meeting the food needs of the domestic population to ensure food security in the event that other countries become unwilling to trade food grown within their borders. Even more important, however, is the need for Australia, as a major food exporter, to contribute to meeting the global food task and thereby prevent the potentially disastrous consequences of major food shortages.

While this is a valid argument for some degree of self-sufficiency, partly aligning with a defence strategy (or insurance policy) in the event of a breakdown in global trade, thinking that being able to meet domestic food demand during peacetime equates to being able to easily meet food demand if international trade ceases is flawed.

Modern food production involves a complex supply chain and our agricultural and food distribution networks rely heavily on foreign made machinery and equipment. Unless we can self-sufficiently support the maintenance and replacement of this associated capital stock, and can provide the energy to support the whole food supply chain, we can’t be produce food at the same level of production as during peacetime. A degree of diversity in our productive capacity would go a long way to providing an insurance policy against a breakdown in global trade, rather than a single focus on current food production capacity at the farm level.

With a diverse economy, even if we were a net food importer, if trade breaks down market forces (or government intervention) will ensure a pickup in food production. Food price increases will encourage more land to be devoted to farming. Land devoted to producing non-food crops would be devoted to essential food crops, and prices changes would lead to diets changing to prefer foods more easily grown domestically.

With the defense argument for food security in mind – that a diverse economy is an insurance policy against global trade breakdown – it is surprising that most agricultural policies are directed not at preserving productive capacity, but preserving the businesses of farmers themselves (eg. drought and flood assistance, subsidising water supplies). In the greatest of ironies no policy has yet protected the productive capacity of the soil and land itself from external threats to from mining.

One could argue that perhaps the current agricultural subsidies for farm businesses are not that suprising since the government signed some very one-sided free-trade agreements, pitting Australian producers against heavily subsidised foreign agriculture (particularly in the US). Indeed, the farming lobby argues that Australia and New Zealand have the lowest agricultural subsidies of the major food exporting countries. In this context perhaps the remaining agricultural subsidies do have an element of food security at their core.

The international data shows that food exporters generally have the lowest agricultural subsidies in any case (including Australian, New Zealand, South Africa, Chile, Ukraine and Brazil). The graph below shows the proportion of exported agricultural production against agricultural subsidies for selected OECD countries (produced with data from here – apologies from the low resolution). From this data we are fairly middle-of-the-road, although perhaps the measure overstates Australian subsidies to a degree (eg. counting the non-agriculture specific fuel-tax credit).

Leaving aside the question of international competition, and the fairness of our free-trade agreements, a policy to ensure long-term food security in the event of global trade breakdown should not be focused on farm business viability, but on preserving the land and soils. If a farm business fails, the productive capacity remains for the next buyer of the property. But if land, soil and water supply irreversibly damaged (eg. groundwater contamination), then potential food production capacity is destroyed.

A bizarre situation can arise where a farmer is being paid drought assistance to protect his business, while he is busy negotiating to subdivide his land for residential lots, or having his land explored for minerals, which would takie the land out of production permanently.

In this light, Queensland is developing a new Strategic Cropping Land Policy. The policy aims to provide a way to prevent development on ‘strategic cropping land’ where it will result in its permanent alienationor diminished productivity. This may include subdivisions, excavation works, or mining and gas extraction. The map below shows some of the identified areas that will fall under the policy in Southern Queensland.

While it is early days on this policy, and the full effectiveness of the integration of this new policy and the existing resources legislation is yet to be seen, it does appear to be a step in the right direction of an agricultural policy that delivers some of the promises of food security to deliver value in terms of national insurance against a breakdown in global trade.

Why is the fuel tax credit now considered a subsidy. It is not, it is there because the fuel tax was brought in to tax people who used public roads to fund their upkeep. Those who receieve these credits don’t use public roads (i.e. ag), and don’t receive the benefit of the tax.
Also be warned of Qld SCL legislation, it’s starting to look somewhat watered down.

Is mining threatening our food security? My question to should we replace mining with government for a start. Bill Shorten says no, but I’m not inclined to believe what he says. The FIRB has/had a 200M trigger to look at land purchases, and I believe a lot of land has been sold already to foreign interests. I have one farmer friend near Goulburn and he says all the properties around his are foreign owned.

It’s a good question and issue Cameron, and I would hope the government have a handle on this, but I’m past the point of believing anything they say.

Mining under agricultural land is tantamount to gambling with national suicide. Groundwater contamination is a one way ticket.
Yes we need energy, the post peak oil period will be very unpleasant, especially for city dwellers when Coles & Woolworths trucks don’t run any more. That doesn’t mean we should act recklessly.

Risking everything in a climate where executive greed and grasping nanny state collude is madness.

I can’t help noticing that the graph seems to show an interesting correlation between exports and subsidies. The higher the subsidy, the lower the export. Can anyone shed some light on the cause an effect there?

The simple answer is that food importers are more worried about food security and therefor devote more spending to ensure farms can remain in business (especially with higher value competing land uses).

Concerns of food exporters are naturally much lower. Hence the comment about export competition being mostly with other low subsidy countries.

Indeed the most interesting thing for me is that countries will subsidise agriculture almost completely to avoid being a net importer of more than 10% of their food.

To Wheatman, yes, I don’t agree the fuel subsidy should be included in the OECD estimates of Australian agricultural subsidies. It makes up about 30% of the total estimate, bringing Australia down closer to the other key food exporters.

I though things like salinity, soil erosion, over allocation of water from the Murray Darling, and climate change were the biggest threats to our food security, worrying about mining’s impact seems a bit premature till we get those issues under control.

You could also question the value of growing water hungry, pesticide dependant non food crops like cotton, in such a dry continent.

I’ll give you points for at least thinking about this important issue.
One worrying aspect of Internet debate is the demand to provide data and charts to illustrate any concept. I doubt that you will find good data on this one. How about just using one’s brain instead?
As a starting point: Does it matter if Queensland grows all the bananas and Tasmania grows all the apples? Probably not.
Next point: Is it OK if we get all our coffee from Brazil and we send them copper/iron in exchange?
Next: Are we happy if all our tractor parts and ammunition come from China?

I think I could have written much more clearly, but I do agree that trade and specialisation are great (within and between nations), but as an insurance policy against global trade breakdown some diversity in the productive capital base is desirable.

@hamish, the MDBA is all over the water and salinity problems – but unfortunately caught in political ping-pong. Also, the farmers I have met through working in resource management are very aware of the long term problems that they themselves have caused and farming practices have been improving steadily. Also the other threat is urban expansion.

While I don’t personally think Australia is, or is likely to be, at a point where limits to agricultural capacity reduce food security, it is at least a good idea to consider the policy tools to develop to allow us to respond should the need arise.

In the end however, there is no optimum amount of agricultural capcity to preserve. It is a social choice about the degree of food security, and if Australians see their role as a food bowl of the world, then we can make choices to ensure this happens.

Nice article, and very relevant. You should look into this issue more closely specifically the furore surrounding CSG and fracking. Plenty of interesting debate regarding CSG atm, especially the environmental side, and also the true commericality of it all long term.

There was an opinion piece in Monday’s Fin Review (page 54) on CSG “Grim Face of Fracking Gas” which you may find interesting. It’s a bit alarmist but I thought about it again after reading this piece.

The author mentions food security briefly “….concentrated as it is often in prime agricultural country, we need to understand that we are mortgaging our future food security to the new methane moguls….”

It’s certainly interesting. BHP might have just spent 20bn on a dud, given the environemental, political and even commerical ambiguity surrounding CSG. Many insiders in the USA have already warned that the rate of well depletion is alot faster than the projections these companies are using.

“Food price increases will encourage more land to be devoted to farming. Land devoted to producing non-food crops would be devoted to essential food crops, and prices changes would lead to diets changing to prefer foods more easily grown domestically.”

Not all land is created equal, and despite our huge landmass Australian soils are, on the whole, extremely poor. There are fertile patches, but most of them are already used for food production.

What this means is that there is a diminishing return as increasingly marginal land is brought into agricultural production, so the supply of land (or, more precisely, the supply of food value from land) cannot respond elastically to increased demand.

When you also consider the dependence of food production on inputs such as phosphorous and oil (for transport, mechanization and fertilizer) that are already at or near their peaks, then it is far from clear that we can rely on market forces to solve food security problems.

Food security might be an issue for the world as a whole, but it is certainly not an issue for Australia. We currently produce enough food for around 80 million people, and could easily double that if the price was right.

As regards CSG and groundwater contamination, I was chatting about this with my local friendly geologist (whose special area of expertise is groundwater). He had quite a few interesting things to say. Key points were: (1) safety of CSG extraction depends on the competency with which it is done. Asking if it is safe is like asking how long is a piece of string. (2) Farmers are mostly fairly quiet about groundwater contamination, because they have been among the chief culprits in the past. (3) Most farmers who actually have the gas companies on their land love it, because they their roads graded, new fences, gates and locks, and substantial payments from the companies as well.

Please watch the US doco called Gasland(s). I was shocked how much the US landscape and water supply has been affected by gas extraction. This is a VERY bad path Australia is heading down…. once our underground water tables are polluted, there is no turning back.

MB Fund

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